Appeals court requires Trump administration to resume funding for Gateway tunnel project

The US Court of Appeals for the Second Circuit on Thursday allowed a lower court directive requiring the administration of President Donald Trump to resume funding for the Gateway Tunnel project connecting New York and New Jersey to take effect. The court chose not to block the order, allowing, at least for now, the project to resume while the lawsuit filed by the two Democrat-ruled states continues. The appeals court is expected to rule again after hearing oral arguments later this month.

The Department of Transportation last fall suspended support for the $16 billion infrastructure initiative, which calls for building two new rail tracks under the Hudson River and connecting them to Penn Station in New York City.

Federal officials have maintained that the pause in funding is part of an ongoing review of the project's compliance with federal regulations. As reported by several media outlets, President Trump told Senate Democratic leader Chuck Schumer of New York last month that he would lift the suspension if Schumer agreed to rename both Penn Station and Washington Dulles International Airport in his honor. "The Trump administration's legal recourse to avoid funding the Gateway Tunnel has expired. Donald Trump needs to follow the law and get the project back on track immediately," New York Democratic Governor Kathy Hochul posted on social media.

Funding reinstated.

Federal District Judge Jeannette Vargas last week ordered the administration to restore funding after the Gateway Development Commission instructed contractors to halt work until federal funds resumed. Vargas, an appointee of former President Joe Biden, ruled in favor of New York and New Jersey, concluding that the suspension of funds likely violates federal rules and could be considered arbitrary and capricious.

According to the administration, complying with the ruling would mean immediately disbursing approximately $200 million. The Justice Department asked the Second Circuit to stay the lower court's order. "The government will be forced to disburse those sums without any obvious mechanism to recover them later if the government prevails on appeal," the DOJ warned in its court briefs.